Breaking Google news on Monday lunchtime:
RTRS-GOOGLE TO ACQUIRE MOTOROLA MOBILITY
RTRS-GOOGLE INC – DEAL FOR $40.00 PER SHARE IN CASH
RTRS-GOOGLE INC – DEAL FOR ABOUT $12.5 BLN
RTRS-GOOGLE INC – SAYS MOTOROLA MOBILITY WILL REMAIN A LICENSEE OF ANDROID AND ANDROID WILL REMAIN OPEN
RTRS-GOOGLE INC – SAYS GOOGLE WILL RUN MOTOROLA MOBILITY AS A SEPARATE BUSINESS.
RTRS-GOOGLE INC – SAYS “VISION FOR ANDROID IS UNCHANGED AND GOOGLE REMAINS FIRMLY COMMITTED TO ANDROID AS AN OPEN PLATFORM”
In pre-market trading Google shares were down 2.8 per cent while Motorola was up 58 per cent.
Right now it’s hard to say who this works out best for; we’re treating it as neutral for Apple but we aren’t sure about HTC and Samsung. The fact that MM will be run as a separate business is probably to get round any anti-trust objections, so we wouldn’t read a whole lot into that. And will the deal make a Motorola phone any more desirable?
More questions than answers at the moment.
More to follow.
Update: 13:22 (London time)
The deal is an attempt to boost Google’s patent portfolio for its mobile platform Android, according Google CEO Larry Page.
We recently explained how companies including Microsoft and Apple are banding together in anti-competitive patent attacks on Android. The U.S. Department of Justice had to intervene in the results of one recent patent auction to “protect competition and innovation in the open source software community” and it is currently looking into the results of the Nortel auction. Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.
So that’s the rationale.
And the big winner of today’s deal is Carl Icahn, the second biggest shareholder in MM. He own 9 per cent of the company and has been urging the company to explore opportunities for its patent portfolio.
It’s certainly done that.
Update: 13.45 (London time)
From Google’s perspective this is a patent deal, it’s got nothing to do with handsets. Moreover, it’s probably a sensible use of its cash given the aggressive moves by Apple and Microsoft, which of course have joined forces with Nokia on patents.
From the FT, July 1.
A group of technology companies including Apple, Microsoft and Research in Motion have paid $4.5bn in cash for a collection of strategically vital patents from Nortel in a blow to Google and its fast-growing Android operating system.
Google had opened the bidding for the remaining portfolio of the bankrupt Canadian telecoms equipment maker in April, with an offer of $900m for the more than 6,000 patents which cover wireless, 4G, data networking, internet and semiconductor technologies.
Google to Acquire Motorola Mobility for $12.5 Billion– Bloomberg
Google buys Motorola mobile phone unit – FT